Datacenter Trends

Datacenter M&A Deals Skyrocket in 2017

What's behind the surging interest in datacenters? Surprisingly, it's not about acquiring assets.

The pace of datacenter merger-and-acquisition (M&A) activity was truly furious last year, with one significant M&A deal closing almost every week, according to a newly published report from the Synergy Research Group.

The total value of all those deals reached $20 billion, the researchers found, totaling more than all the deals of this kind that closed in 2016 and 2015. In fact, the total number of deals -- 48, according to Synergy -- is three more than the combined total of the two previous years.

That pace shows no signs of slowing. Four major datacenter acquisitions valued at more than $2.6 billion are expected to close soon.

The largest datacenter deal closed last year was the $7.8 billion acquisition by Digital Realty Trust of the purpose-built datacenters of DuPont Fabros Technologies. That deal, announced in June, allows San Francisco-based Digital Realty to grow in top markets, such as northern Virginia, Chicago and Silicon Valley, the company said at the time. (DuPont Fabros is based in Washington, D.C.) The acquisition "will significantly expand Digital Realty's hyper-scale product offering and improve its ability to meet the rapidly growing needs of cloud and cloud-like customers," Digital Realty said in the statement.

Deals closed last year involving Equinix, Cyxtera, Peak 10 and Digital Bridge were worth a billion dollars or more, Synergy reported, and another 12 deals were valued in the $100-million-to-$1-billion range, with 31 smaller deals valued at up to $100 million each.

What's behind this interest in datacenters? John Dinsdale, Synergy's chief analyst and research director, says it's not about acquiring assets.

"Above all else, what is driving the datacenter M&A activity is enterprises focusing more on improving IT capabilities and less on owning datacenter assets," Dinsdale said in a statement. "That shift is driving huge growth in outsourcing, whether it is via cloud services, or use of colocation facilities, or sale and leaseback of datacenters. The dramatic growth of cloud providers is also driving changes in the datacenter industry, as datacenter operators strive to help them rapidly increase scale and global footprint. We expect to see much more datacenter M&A over the next five years." 

It's worth noting that only three of the 45 M&A deals closed in 2015 and 2016 hit the billion-dollar-plus range. The largest deal in those two years was the Equinix acquisition of European retail colocation provider TelecityGroup for $3.8 billion. During that period, Equinix and Digital Realty were the largest investors in datacenters. Equinix has made major acquisitions in all four regions of the world; Digital Realty has focused its M&A activity on the United States and Europe.

The list of "notable acquirers" the Synergy researchers cited included CyrusOne, Peak 10, Digital Bridge, NTT, Carter Validus, Iron Mountain, Cyxtera and Elegant Jubilee.

About the Author

John K. Waters is a freelance author and journalist based in Silicon Valley. His latest book is The Everything Guide to Social Media. Follow John on Twitter, read his blog on, check out his author page on Amazon, or e-mail him at


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